1.

A trader writes a put option on a stock that has a current price of $50; the option price is $5, and the exercise price is $52. At expiration the stock closes at $54. The intrinsic value of the option at expiration is:

Question 1 options:

	$4
	$2
	$5
	$0

2.

At expiration the value of a long forward contract is the spot price of the underlying minus the:

Question 2 options:

	Forward price agreed in the contract compounded at the risk-free rate over the life of the contract.
	Forward price agreed in the contract.
	Forward price agreed in the contract discounted at the risk-free rate over the life of the contract.

3.

Which of the following is NOT a systematic risk?

Question 3 options:

	The risk that the economy slows, reducing demand for your firm's products
	The risk that the Bank of Canada raises interest rates
	The risk that oil prices rise, increasing production costs
	The risk that your new product will not receive regulatory approval

4.

A trader buys a call and sells a put with the same strike price and maturity date. What is the position equivalent to?

Question 4 options:

	Buying the asset
	A long forward
	Selling the asset
	A short forward